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Written Ministerial Statements

Tuesday 11 May 2004

WORK AND PENSIONS

Barking and Dagenham Council (Benefit Fraud Inspectorate)

The Parliamentary Under-Secretary of State for Work and Pensions (Mr. Chris Pond): On behalf of my right hon. Friend the Secretary of State for Work and Pensions, the Benefit Fraud Inspectorate (BFI) inspection report on London Borough of Barking and Dagenham Council was published today and copies of the report have been placed in the Library.

Following the housing Green Paper "Quality and Choice: A Decent Home for All", published in April 2000, the Department for Work and Pensions developed a performance framework for housing benefits. The performance standards for housing benefits allow local authorities to make a comprehensive self-assessment of whether they deliver benefit effectively and securely. They are the standards that the Department for Work and Pensions expect local authorities to aspire to and achieve in time.

In 2002–03, London Borough of Barking and Dagenham Council administered some £65.4 million in housing benefits, about 16 per cent. of its gross revenue expenditure.

BFI inspected London Borough of Barking and Dagenham Council against the performance standards for housing benefits, and concludes that the council's benefits service had not reached standard in any of the seven functional areas—strategic management, customer services, processing of claims, working with landlords, internal security, counter-fraud and overpayments.

The report finds that the council's benefits service, part of the revenues services, was embarking on a major programme of change that included improving its performance management, planning the replacement of its benefits IT system, planning the procurement of an electronic document management system, and reviewing its staffing structure.

There was no structured approach to staff training and development of staff, and there were no documented procedures to support staff and ensure consistency of approach. Managers had limited access to performance reports and did not make routine use of those that were available. The IT systems were inadequate and required high levels of manual intervention, hindering rather than supporting the benefits service.

The report finds that the average time taken to process new benefit claims was 43 days, compared to the performance standard of 36 days, and 90 per cent. of new claims were processed within 14 days of receiving all
 
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information. However, there were delays in dealing with changes of circumstances and appeals and there was no management checking of work.

The council's telephone service was poor with 54 per cent. of calls not being answered. Customers were often required to attend the offices on more than one occasion because they had not been asked to provide all the necessary information at the first point of contact. There were weaknesses in the management of documents with staff being unable to locate paperwork, resulting in further unnecessary contact with customers. The council's benefit claim forms and decision letters needed to improve to give clearer guidance and information to customers.

The report also finds that all areas of the council's counter-fraud activity were weak. The council had no management information concerning fraud referrals, and very limited investigation activity had been carried out. New investigation staff had been appointed in 2003 but there were inadequate systems in place to allow them to progress investigations promptly.

The council was unable to provide verifiable performance information relating to overpayments of benefit, and no single officer had overall control of overpayment recovery. Also the council did not use the full range of recovery methods available.

The report makes recommendations to help the council address weaknesses and to further improve the administration of housing benefit and council tax benefit, as well as counter-fraud activities.

My right hon. Friend the Secretary of State is now considering the report and will be asking the council for its proposals in response to the BFI's findings and recommendations.

Vulnerable Customers (Payments by Cheque)

The Parliamentary Under-Secretary of State for Work and Pensions (Mr. Chris Pond): Direct Payment is a modern, reliable, secure and efficient method of payment which is proving popular with those pensioners and benefit recipients who are using it. More customers now have their pensions and benefits paid into an account than by order book. We will be writing to the remainder before the end of the year inviting them to convert to direct payment.

Eighty seven per cent. of DWP customers already have access to an account suitable for direct payment (the figure rises to 91 per cent. for pensioners). The wide availability of new, easy to operate accounts (including basic bank accounts and the Post Office card account) means that there should only be a very small number of people that cannot genuinely open an account—including, for example, some homeless people and some people with an illness or disability. There will also be some people who cannot manage an account—some will never be able to manage one (again due to illness or disability), while others may be in this position for only a short period (perhaps due to the absence of a regular carer or a short period of mental illness).
 
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Several meetings have been held with customer representative groups (including CAB, Help the Aged, Age Concern, MIND etc) to ensure there was a shared understanding of the needs of the customers who cannot be paid directly into an account. These meetings helped us develop a detailed list of requirements and played a key role in shaping the detailed design of the exceptions arrangements.

In assessing options for the ongoing method of payment for customers who are unable to open or manage an account a number of criteria were taken into account including; the ability to meet the needs of customers, timescales for delivery, reliability and cost. To meet customer needs and maintain a robust delivery service we have decided to continue with the existing system of cheques, with improvements to the security of the service.

Customers who will require a cheque payment are likely to include those who are least able to cope with change, but will already have had experience of, and be familiar with, cashing paper instruments of payment at the Post Office. The cheque solution replicates this process and will best suit these customers.

Cheques can be issued on a weekly basis to the customer's home address (less frequently for some people) and are cashable at Post Office branches (as well as payable into bank accounts). Very importantly, they offer the flexibility needed for those customers who have a series of different people collecting their money for them and will be a solution for those people who are unable to operate PIN-based or cheque based accounts.

Safeguards will be in place to ensure people get their money in the event that the cheque does not arrive on time.

Paying by cheque is a well-established method of payment. We will closely monitor the operation of cheque payments to ensure that they meet the needs of some of our most vulnerable customers. If this identifies significant problems with these arrangements then we will make the necessary improvements.

As we have made clear cheque payments are designed for those vulnerable people whose benefits or pensions we cannot pay into any type of account. In order that we can provide the necessary level of support to this group we will, in parallel, introduce measures to ensure the maximum number of people who can use an account understand the comparative benefits of direct payment.

ENVIRONMENT, FOOD AND RURAL AFFAIRS

Landfill Allowance Trading Scheme

The Minister for the Environment (Mr. Elliot Morley): My Department today published the outcome of the Landfill Allowance Trading Scheme Consultation, which contains final details on the operation of the scheme. This is available on the DEFRA website www.Defra.gov.uk.

The aim of the scheme is to enable England to meet the targets set by the landfill directive for reducing the amount of biodegradable municipal waste sent to landfill in the most cost effective way. It will be launched on 1 April 2005.
 
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The Landfill Allowance Trading Scheme is thought to be the first trading scheme in the world involving waste. The Government will allocate a decreasing number of allowances for each waste disposal authority in England for each year between 2005 and 2020. Authorities can then choose to trade these with other authorities, to borrow up to 5 per cent. of allowances from their next year's allocation or to bank unused allowances for use in future years. The scheme is designed to give waste disposal authorities as much flexibility as possible, whilst ensuring that the landfill directive targets are met. This is an innovative scheme that forms part of a comprehensive commitment to reduce waste in England.

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